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BlackRock’s IBIT Sees First Daily Net Outflows Since May Amid Ongoing Spot Bitcoin ETF Withdrawals
On Thursday, U.S. spot bitcoin ETFs experienced $71.73 million in net outflows, extending their three-day outflow streak. BlackRock’s IBIT saw its first negative flows since May 1, with $13.51 million in outflows. Other ETFs also reported losses: Grayscale’s GBTC had $22.68 million in outflows, Fidelity’s FBTC saw $31.11 million exit, Bitwise’s BITB recorded $8.09 million in outflows, and Valkyrie’s BRRR experienced $1.68 million in outflows. Ark and 21Shares’ ARKB was the exception, logging $5.34 million in net inflows. Total trading volume for spot bitcoin ETFs fell to $1.64 billion. Spot ether ETFs also saw minor outflows, with the Grayscale Ethereum Trust reporting $5.35 million in outflows, while the Grayscale Ethereum Mini Trust recorded $3.57 million in inflows. Overall trading volume for spot ether ETFs decreased to $95.91 million.
Threshold Proposes tBTC Merger to 'Rescue' WBTC in Bitcoin DeFi Protocol Move
Threshold, a Bitcoin DeFi protocol, has proposed merging its tBTC with WBTC following concerns about WBTC's stability due to BitGo's plan to transfer partial control to Justin Sun’s BiT Global. The merger would make BitGo the largest holder of Threshold’s T token and transfer WBTC's mint and burn control to ensure stability and user safety. This move responds to industry skepticism over BitGo’s arrangement with Sun and aims to reassure protocols using WBTC. If approved, the proposal would also increase tBTC supply and involve Threshold DAO in managing WBTC operations.
Mt. Gox and US Government May Create $15B Bitcoin Selling Pressure
Bitcoin may face extended sluggishness into September due to potential $15 billion in selling pressure from Mt. Gox and the US government. The US government holds over 203,000 Bitcoin worth $12.1 billion, while Mt. Gox plans to distribute 46,000 Bitcoin worth $2.7 billion by the end of 2024. Although Mt. Gox creditors have been waiting for their funds for a decade, the actual market impact may be limited, as creditors have not significantly sold previous distributions. Bitcoin's price remains subdued below $60,000, and analysts caution that the market may struggle with liquidity and resistance levels in September, historically a weak month for Bitcoin.
Trading Desk Insights
Technical Analysis:
After showing signs of bullish momentum towards the end of last week, Bitcoin saw a sharp rejection of the $64,500 level as this week began. On Monday afternoon, BTC's price initiated a steep 10% decline, driven by significant selling pressure that emerged after the market failed to sustain the $64,000 support. This downturn signals a likely continuation of Bitcoin's price movement within the declining parallel channel seen on the daily chart. BTC price currently sits in the middle of this channel at $58,440, but if the selling pressure persists and a retest of $58,000 ensues, price will likely drop further to $54,000.
Ethereum (ETH) has also been under intense pressure, with its price falling 13% from $2,800 to $2,400 over the past week. ETH has been overshooting Bitcoin on the downside, a trend that started in early August when Bitcoin experienced a 25% drop, leading to a more pronounced 40% decline in Ethereum. This divergence has caused the ETH/BTC ratio to plummet to 0.04, a level not seen since April 2021. Currently, the ETH/BTC ratio sits at 0.0422, but a potentially bearish rising wedge pattern forming on the daily chart suggests that traders should exercise caution when navigating this pair.
In a significant move for the crypto market, former President Donald Trump announced yesterday that he plans to position the United States as the global leader in blockchain and digital assets. Trump hinted at a forthcoming strategy that aims to make America the "crypto capital of the planet." His comments align with growing political interest in the cryptocurrency sector, underscored by the World Liberty Financial initiative led by his sons, Donald Trump Jr. and Eric Trump. Although details remain sparse, speculation suggests this project might focus on real-world asset tokenization. However, the Trumps have cautioned the community about potential scams, advising vigilance on their official Telegram channel, which has garnered over 53,000 followers.
Trump's pro-crypto stance was noticed at the Bitcoin 2024 conference in July, where he pledged to establish a strategic Bitcoin reserve and remove SEC Chair Gary Gensler from his position. This aligns with Republican Senator Cynthia Lummis's recent Bitcoin bill, which proposes leveraging America's existing gold reserves for a long-term Bitcoin hold strategy. In parallel, the market faces potential headwinds as approximately $15 billion in Bitcoin is set to enter the market. The U.S. government holds over 203,000 BTC, valued at around $12.1 billion, while the defunct Mt. Gox exchange is preparing to release an additional 46,000 BTC before the end of the year, worth $2.7 billion. The sheer volume has traders on alert for possible increased selling pressure.
Equity Markets: Stocks Edge Higher Amid Inflation Data
U.S. equities showed resilience on Friday, capping off a turbulent month with modest gains as traders weighed crucial inflation data. The S&P 500 climbed 0.5% as the personal consumption expenditures (PCE) price index, a key inflation metric closely monitored by the Federal Reserve, aligned with expectations. The PCE index saw a 0.2% monthly increase and a 2.5% year-over-year rise. This data suggests that inflationary pressures remain contained, reinforcing market sentiment that the Fed may hold off on further rate hikes. Traders are keeping a close eye on these developments as they adjust their portfolios to navigate the shifting economic landscape.
Crypto Charts
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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